Bird Group shows interest in Air India’s ground handling subsidiary
New Delhi: Gurugram-based travel firm Bird Group has expressed interest in bidding for Air India Ltd’s ground handling subsidiary as part of the state-owned airline’s proposed privatisation.
“This is the second formal interest for Air India we have received,” aviation secretary R.N. Chaubey told reporters on Wednesday, ahead of an aviation conference in New Delhi.
Interglobe Aviation Ltd, which runs IndiGo, earlier showed interest in Air India, mainly its international operations.
“We have sent an expression of interest in Air India’s ground handling subsidiary,” Ankur Bhatia, executive director of Bird Group, said on the phone from London where he is on a visit.
Bird Group was founded in 1971 with the setting up of Bird Travels; it now has 45 offices and a staff of 9,000. The group has interests in technology, aviation services, hospitality, luxury retail and education. The group runs BMW and Mini Cooper sales outlets, among others.
Bird group also provides ground handling services to airlines.
Air India Air Transport Services Ltd (AIATSL) provides ground handling services at about 70 airports, is profitable and has about 12,000 employees. AIATSL earns annual revenue of Rs700 crore, generating a profit of Rs100 crore, said an Air India official who did not wish to be named.
Ground handling is a lucrative business and involves handling many service requirements of an airliner between the time it arrives at a terminal and the time it departs on its next flight.
While Bird Group is keen on Air India’s ground handling services, an acquisition will depend on how the government structures the sale that will define the road ahead for the group, Bhatia said. The Cabinet Committee on Economic Affairs (CCEA), in a meeting on 28 June, gave in-principle approval for the strategic disinvestment of Air India and its five subsidiaries and also approved the appointment of advisors for the process.
Besides InterGlobe Aviation, private equity firms KKR and Co. and Warburg Pincus are considering throwing their hats in the ring for Air India, Mint reported on 23 July.
Coincidentally, Bird Group’s Ankur Bhatia and InterGlobe’s group managing director Rahul Bhatia are distant cousins. Both families migrated to India from what is now Pakistan and got into the travel business, which they have expanded manifold.
An analyst who did not wish to be named said there was exceptional interest in Air India, both from companies seeking a chunk of the airline’s business and from consultants and investment bankers who would want to be in on the deal as advisors.
“Its a marquee deal. People will do it for Re1 just to have it on their resume,” he said.
Meanwhile, a group of ministers appointed by the Union cabinet to look into disinvestment of Air India held its second meeting on Wednesday.
Finance minister Arun Jaitley, civil aviation minister Ashok Gajapathi Raju, railway minister Suresh Prabhu, power minister Piyush Goyal and transport minister Nitin Gadkari are part of the group.
Gadkari earlier this last month said profit-making subsidiaries of Air India should be kept out of privatisation.
“Any business that is profitable should be encouraged by the government,” he said.